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State bill annually allocates private activity bond cap among Maine issuers; FAME, MaineHousing outline plans

Committee on Housing and Economic Development (Joint Standing Committee) · January 22, 2026

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Summary

LD2156 is an annual allocation bill that divides federally authorized private activity bond cap for 2026–2027 among FAME, MaineHousing, the state treasurer and the Municipal Bond Bank; agencies described uses including affordable housing, student loans, PFAS treatment and manufacturing projects and proposed a technical amendment to clarify allocations.

Senator sponsoring LD2156 said the bill is an annual housekeeping measure submitted by the Finance Authority of Maine (FAME) to allocate the federally authorized state ceiling for tax‑exempt private activity bonds for calendar years 2026 and 2027 among the state’s designated issuers. He emphasized the bill does not authorize state debt or create a state liability but allows designated issuers to use federal tax‑exempt bond authority to finance projects with public benefit.

Bill Norbert (FAME) and CEO Carlos Mello described the mechanics: FAME, MaineHousing, the Maine Municipal Bond Bank and the state treasurer typically coordinate allocations, adjusting between years to match anticipated projects. FAME explained projected 2026 demand includes industrial projects (an EME Biofuels project and a Sanford PFAS sludge treatment project) and an anticipated student‑loan bond issuance; MaineHousing’s Eric Jorgensen said the agency uses private activity bonds for first‑time buyer mortgages and for construction loans for affordable rental housing. Both agencies supported the bill and requested a technical amendment fixing allocation numbers in the draft.

Committee members asked for justification of the year‑to‑year allocation shifts and for greater clarity on the Municipal Bond Bank’s historical non‑use of allocated cap. FAME and MaineHousing explained allocations reflect projected pipeline needs and that unused allocation typically reverts to other issuers in subsequent years.

Next steps: the committee accepted the testimony, noted the proposed technical drafting fix and retained the item for the work session and further committee consideration.